Information is power. The more you know about your target market and what drives their purchasing decisions the better position you will be in to win their business and their loyalty. The age of shotgun blast marketing to the masses is over – at least when it comes to online marketing strategies.
Behavioral targeting is the most highly effective way to promote your brand. But, what exactly is behavioral marketing and how do you go about performing data collection, analyzing it, and apply what you learn to increase sales? Keep reading to understand the power of behavioral marketing and how you can cash in on this marketing megatrend.
What is Behavioral Targeting?
Humans are creatures of habit. Behavioral marketing is a marketing strategy that operates on the principle of what people do online tells us many valuable things about them. The whole process can be broken down into three stages:
- Data collection
- Data analysis
- Targeted advertising
The primary goal of a campaign strategy that utilizes behavioral targeting is to deliver advertising messages to only those that have shown an interest in what the company has to offer. Audience segmentation and behavioral targeting are the fancy marketing terms for doing just that.
A Brick and Motor Example
Your purchase behavior is being collected constantly, and you may not even be aware of it. Take your local or chain neighborhood grocery store for example. Chances are you have a “rewards” or “membership” card in your wallet right now.
You were probably happy to become a member as it comes with certain privileges. Discounts, special promotions, entry into sweepstakes, and even free stuff are often used to build loyalty by giving customers incentive to keep coming back. What you may not realize is that these stores keep a file on you, collecting big data on your purchasing behavior.
Remember the form you filled out in order to receive your membership? This innocent little questionnaire asks questions about your age, sex, address, your profession, and even your salary bracket. This information is then used to place you in various marketing demographics.
Every time you go for your monthly household shopping, your membership card is scanned and those purchases are added to your file as pieces of data on your purchasing behavior. This information can be used to directly market to you in the form of emails or special offers or in general to learn how to better arrange the store to maximize spending.
It only seems ominous as you may not know marketing is their main objective. The arrangement is actually a win-win for both parties. They are able to offer you more of what you want and less of what you don’t, which makes shopping a more pleasant experience, and they in turn sell you more cookies and cream.
Behavioral Marketing Benefits
Let’s face it, advertising has earned a bad reputation over the years as little more than a nuisance. I think we can all relate. You are deeply engaged in your favorite sitcom, game show, or sporting event on TV when suddenly in your face comes 5 minutes of commercials asking you to buy things you have zero interest in.
A long sigh comes next and you do your best not to pay attention, but those commercials haunt your subconscious anyway. It is no small wonder why so many are “cutting the cord” and trading in cable for online streaming services. Society is finally fed up with mass media marketing. What’s more, consumers are tired of paying through the nose for the annoyance.
Not to worry though, advertising is changing with the times, much like everything else. Advertisers have almost no interest in wasting your time and annoying you with advertising that is not intended for you anyhow. Behavioral marketing is not only a way to stop annoying consumers but has many benefits for the advertiser as well.
The Proof Is in the Conversion Rates
If you ever worked in sales you were probably told to get used to rejection as it is the biggest part of the job. “Every no is closer to a yes,” they told you. Well, it doesn’t have to be that way. Personalized and targeted ads are far more interesting and engaging to the consumer.
A recent study found, 71% of consumers prefer personalized ads. And why wouldn’t they? If I am a cat, I want what a cat wants, and could care less about the things of dogs. This is why conversion rates of behavioral marketing campaigns blow away those of other strategies.
There are literally thousands of online platforms companies can choose to market with. From Google and Facebook to Amazon and Reddit new digital marketers must have a strong stomach because they are in for quite a ride.
Youtube advertising is a good example of how behavioral marketing works. When you launch a video advertising campaign on YouTube you can choose very specifically your audience. You only pay the youtube cpm rates that match your criteria.
Let’s say your company a retail store in downtown New York that sells name-brand women’s shoes. Instead of paying for a thousand views of random Youtube viewers, half of which will statistically be men (decidedly outside your target market), your company can tell YouTube to only show your ad to American women in the New York area that watch fashion YouTube channels. Which campaign is more likely to convert sales?
How Does It Work?
By now you should understand how behavioral targeting works and maybe getting a little excited about the possibilities. So let’s get down to brass tacks and lay out the path for you step by step. This is how professional digital marketers do it.
Step 1 Give Away Cookies
Sorry to disappoint, but no, not the delicious mint cookies that the girl scouts sell you. Internet cookies are little bits of code that websites installs on your device in order to identify you the next time you visit.
These cookies automatically record all sorts of data about what you search for, what you purchase, how long you stay on a particular page, etc. This information is the golden key to the whole strategy.
Step 2 Analyze the Data
Getting to know visitors to a website takes time or more accurately lots of data. Eventually, as visitors engage with your website dozens of times a pattern begins to emerge. A “user profile” is created to give you an idea of what this individual consumer is all about.
User profiles are then separated into various consumer groups. One user profile can be attached to any number of consumer groups. For example, one user may be tagged as a “sports fan” and a “father of two boys”. Next time this user comes back, you may want to offer him a two for one deal on baseball gloves.
Step 3 Offer Personalized Content
Although online shopping continues to quickly gain in popularity, if the trend is to continue, digital marketing must find a way to be more personable, more friendly. Remember when Amazon and E-Book readers threatened to make obsolete book stores that sold actual paper books? Right, it never happened, because there is considerable value to the “experience” of shopping for and reading the real thing.
Online retailers must become more like the friendly and helpful employees of your favorite coffee shop. By simply paying attention and caring about serving the actual needs of your customers, consumers will appreciate it and reward you with their business.
“Why, hello there Joe. The usual today? By the way, how are your daughter’s final exams coming along? There is a sale on text prep materials down the road you might be interested in.”
I think you get the idea. Good old fashion customer service is at the very basic core of behavioral targeting.
Remember the True Meaning of Business
The speed of business and life, in general, makes it easy to lose sight of the true purpose of operating a business. Collecting profits from a business is not the purpose, but rather the result of good business practices.
Being in business is NOT about making money. It is about helping people. It’s about providing value in the form of helping people get what they want and/or need in life.
The more people you help and the better you help them, the more money your business will earn. Behavioral targeting campaigns can help you do just that.
Behavioral Targeting Works
It is much easier to sell a product or service to those that are already interested in them. Gaining a receptive audience is the whole goal of behavioral targeting. We already live in a world of instant gratification where we expect our questions to be answered on demand.
Today’s consumers are good at finding ways to ignore irrelevant and unwanted advertising. If you want to get their attention you will need to get creative, get high-tech, and find them first.